The government is to appoint a minister for Portsmouth to help the city recover from the loss of Royal Navy shipbuilding, it has been reported.

Michael Fallon – a former Conservative deputy chairman who holds ministerial posts in the business and energy departments – is expected to be named as minister with special responsibility for the south Hampshire city, according to the BBC.

His appointment was welcomed by politicians in Portsmouth, who said the port city was in need of support following the decision to move navy shipbuilding to Scotland, with the loss of almost 1,000 jobs due to the closure of the BAE Systems shipyard.

The leader of Portsmouth city council, Gerald Vernon-Jackson, said: "I am glad that it seems ministers are listening and we are going to have somebody like Michael to help us cope with the loss of shipbuilding. We have had just silence from the Ministry of Defence about this, so I am pleased that another department is willing to listen.

"He will have the ability to pull everything in Westminster and Whitehall together to make sure that we know what support there is available, not only from the UK government but also from Europe.

"The loss of shipbuilding is a real blow for Portsmouth – it is the loss of 1,000 skilled jobs – so it is about trying to replace those and to find additional work for them."

The Portsmouth South MP, Mike Hancock, said: "I welcome the initiative. It's the first time it's been done since Michael Heseltine was appointed minister for Liverpool in the 1980s. At last maybe now the government are taking the problems in Portsmouth seriously.

"He has got to look at how we can preserve the skills base in Portsmouth and the greater Portsmouth area. We have got to make sure he realises the size and scope of the problems and can work with local authorities and unions to try to bring about a mechanism which will go some way to encourage other businesses – either shipbuilding or maritime-related – in the space vacated by BAE in the shipyard.

"We have to bear in mind that Michael Fallon has already got two other jobs. I just hope he has the time and energy to devote to the issues we are facing.

"I am in the process of writing a letter of welcome to him, saying I would appreciate him coming down here as soon as possible."